Exchange Rate Stability and Financial Stability

Eichengreen, Barry

doi:10.1007/978-1-4757-5450-6_9

Cited by 20 publications

(15 citation statements)

References 29 publications

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“…In relation to exchange rates, the literature considers that fixed exchange rates should help financial stability (Bordo et al 2001, Eichengreen andRose 2004), although according to Eichengreen (1998) there is not a simple correlation between the exchange rate regime and banking crises; rather, it depends on the source of disturbance. Regarding capital controls, Bordo et al (2001) maintain that whereas banking crises are less likely with capital controls, as was the case during the Bretton Woods period, currency crises are more frequent when capital controls are in place.…”

Section: Monetary Policy Regime and Financial Structure As A Source Of Financial Instabilitymentioning

confidence: 99%

Capital Flow Bonanzas as a Fundamental Ingredient in Spain's Financial Crises, 1850-2015

Betrán

Pons

2020

RHE / JILAEH

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This paper analyses the mechanisms through which capital flows produced financial instability in Spain over a 165-year period. We study why and how capital bonanzas make crises more likely and severe, and whether their incidence varies depending on types of crises (currency, banking and debt crises). We conclude that most of them occurred in different monetary policy regimes, but they were associated with capital bonanzas in a liberal regulatory framework, both of which contributed to a higher likelihood and greater severity of crises. The analysis of the different monetary policy regimes, financial structures and the types of crises allows us to draw some policy implications that emphasise the need for sound financial regulation and supervision.

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Section: Monetary Policy Regime and Financial Structure As A Source Of Financial Instabilitymentioning

confidence: 99%

Capital Flow Bonanzas as a Fundamental Ingredient in Spain's Financial Crises, 1850-2015

Betrán

Pons

2020

RHE / JILAEH

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“…There are a few studies that point to larger nominal wage flexibility in some countries after joining the ERM than earlier, but there are also studies that do not find such an effect (Eichengreen 1998). In general, it has not been possible to show that a larger nominal demand shocks are accompanied by more nominal wage and price flexibility, (Ball et al 1988), (Layard et al 1991).…”

Section: Wage Restraintmentioning

confidence: 99%

When Eastern Labour Markets Enter Western Europe: CEECs Labour Market Institutions Upon Euro Zone Accession

Tyrowicz

2009

SSRN Journal

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This paper reviews the literature on the labour market institutions in European Union Member States in the context of monetary integration. Traditionally, labour markets are a key concept in the optimal currency area theory, playing the role of the only accommodation mechanism of asymmetric shocks after the monetary unification. There are several theoretical frameworks linking the institutional design of the labour market to the potential effectiveness of monetary policy in the context of currency areas. Many empirical studies addressed these issues too, yielding important policy implications for labour market reforms in the process of monetary unification. However, there seem to be "white spots" in this patchwork, which may actually be particularly useful from the perspective of CEECs upon the accession to the euro zone. We suggest these research directions encompassing labour supply and theoretical frameworks of labour market flexibility benchmarking in the context of monetary integration.

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“…Domaç and Martinez Peria (2000) find that fixed exchange rate regimes, and implicitly an exchange rate-based monetary strategy, are preferred to reduce the likelihood of banking crises among developing countries. However, Eichengreen (1998) argues that whether fixed or floating exchange rate regimes reduce the probability of banking crises depends on the source of disturbances. If the threat to the stability of the banking system comes from outside, there is a case for exchange rate flexibility (which may translate into a monetary or inflation targeting in terms of the monetary policy strategy).…”

Section: Purpose Of the Studymentioning

confidence: 99%

Financial Stability and the Design of Monetary Policy

Garcı́a-Herrero

López

2003

SSRN Journal

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The Working Paper Series seeks to disseminate original research in economics and finance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment.The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem.The Banco de España disseminates its main reports and most of its publications via the INTERNET at the following website: http://www.bde.esReproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged

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Exchange Rate Stability and Financial Stability

Cited by 20 publications

References 29 publications

Capital Flow Bonanzas as a Fundamental Ingredient in Spain's Financial Crises, 1850-2015

Capital Flow Bonanzas as a Fundamental Ingredient in Spain's Financial Crises, 1850-2015

When Eastern Labour Markets Enter Western Europe: CEECs Labour Market Institutions Upon Euro Zone Accession

Financial Stability and the Design of Monetary Policy

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